Friday, April 5, 2013

Cuccinelli appoints outside counsel to Star Scientific case

Attorney General Ken Cuccinelli and candidate for governor.

Attorney General Ken Cuccinelli and candidate for governor.

The pressure to appoint outside council to handle the Star Scientific tax lawsuit case could not be ignored any longer. Attorney General Ken Cuccinelli has been criticized for having a conflict of interest and Democrats have criticized him for his refusal to resign his current office to run for governor – a long standing tradition.

Henrico-based Star Scientific Inc. sued Virginia’s Department of Taxation in Mecklenberg Circuit Court in July 2011 over a $700,000 tax dispute with the state. Cuccinelli’s 2012 Statement of Economic Interest reports $10,001 to $50,000 worth of Star Scientific stock as his only investment. Cuccinelli claims that it was a financial disclosure oversight.

In addition Cuccinelli’s financial filings also indicate a relationship between the GOP’s presumptive nominee for governor and Star Scientific’s chief executive officer, Jonnie Williams.

In his press release he denies any conflict of interest instead saying it has become an unnecessary distraction. The case was not moving forward creating the perception Cuccinelli was “sitting on it” but he says there is no evidence that he attempted to intervene in the case.

In a press release today:

RICHMOND (April 5, 2013) — The Office of the Attorney General announced the appointment of outside counsel to the Star Scientific tax lawsuit case today.

Former Attorney General of Virginia Stephen D. Rosenthal, a Democrat, and former Solicitor General of Virginia William H. Hurd, a Republican, both of the law firm of Troutman Sanders, will be handling the case for the Virginia Department of Taxation pro bono.

Rosenthal and Hurd issued a joint statement, saying, “We hold the Office of the Attorney General in high regard and we are pleased to assist the attorney general and the commonwealth by taking this case at no cost to Virginia taxpayers.”

“To be clear, there was absolutely no conflict of interest with the attorney general’s office.  But in an abundance of caution and to move past what has become an unnecessary distraction for the office and the attorney general, the case was given to outside counsel,” said Brian Gottstein, spokesman for the attorney general’s office.  “We sincerely appreciate former Attorney General Rosenthal and former Solicitor General Hurd for handling this case pro bono.”

Star Scientific is suing the commonwealth in a disagreement over the interpretation of state tax law, alleging an erroneous assessment.  The assessment has been in dispute between the company and the tax department since the Warner Administration in 2002.  The company brought suit in 2011.


  • Attorney General Ken Cuccinelli has not been personally involved in this case.  
  • As the Washington Post reported, “There is no evidence that Cuccinelli sought to intervene personally in Star Scientific’s suit, which the company filed in July 2011 to challenge a sales and use tax assessment.” 
  • The attorney general ‘s office has responded to the suit, defending the tax assessment. The commonwealth has filed all required pleadings with the court on time and according to all deadlines imposed.  
  • While this suit has been in the court since mid-2011, because the commonwealth is the defendant in the suit, the attorney general’s office is not the primary driver of the timetable of when the case is heard.  The scheduling of civil cases for trial is generally initiated by the plaintiff.  The OAG staff attorney talked at year-end 2012 and again in March 2013 to Star Scientific’s counsel about moving the case forward.
  • Rosenthal and Hurd will be working with plaintiff’s counsel to continue moving the case forward.
  • With respect to the reporting of his stock position in Star Scientific, the attorney general, upon becoming aware of the administrative reporting oversight that his combined holdings exceeded $10,000 (the threshold for disclosure), immediately filed a revised disclosure report in October 2012 — long before this media inquiry — to be fully compliant and transparent with the public about his holdings.

Posted By Valerie Garner

Categories: Election 2013, Elections, Politics, State Politics

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